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Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg1 Welcome! (Please start the slide show to begin) Except as noted, each slide is fully animated. When it’s.

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1 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg1 Welcome! (Please start the slide show to begin) Except as noted, each slide is fully animated. When it’s time to go on, action buttons will appear: Slide Show/ View Show (These buttons are just examples) You can leave the show at any time by pressing Esc Jump Hot buttons generally look like this. Click to jump. Some pages have notes: After the show, hit Esc, then select View/Notes Page. Notes start on P. 2 This is a demo button. It doesn’t actually work

2 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg2 John Boyd and the Toyota Production System This might seem like and odd topic. After all, nowhere in the many descriptions of the TPS are OODA loops mentioned, and I don’t think John ever even owned a Toyota. On the other hand, he did devour the translations of Taiichi Ohno and Shigeo Shingo and freely acknowledged that they drew from many of the same sources as he did—the strategic tradition that includes Sun Tzu’s Art of War and Musashi’s Book of Five Rings. Most important, the TPS represents a spectacularly successful confirmation of the preeminence of time, a fact explicitly recognized by Toyota itself and a main theme of Boyd’s theory of competition.

3 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg3 To paraphrase Tom Peters’ “Turn Manufacturing into a Marketing Weapon,” a chapter in Thriving on Chaos The Goal

4 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg4 Manufacturing as a Competitive Weapon Shorter throughput (order to delivery) Lower costs Higher quality More flexibility

5 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg5 Toyota Motor Company, Toyota Production System, p. 2 The Strategy

6 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg6 Why Toyota? The Plan

7 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg7 Cost reduction is the goal Manufacturing as a Competitive Weapon There are two ways to increase efficiency: 1) increase production quantity or 2) reduce the number of workers—Taiichi Ohno. Over time, lower costs, higher quality, and faster development & production times will increase sales. Reduce people at all levels in the organization “Cost Reduction Is the Goal” In the short term, you may need to Why?

8 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg8 A Lean Paradox (Just One of Many) Resolve how to maintain mutual trust while reducing people Reducing costs means reducing people, but if you eliminate people as a result of improvement, you will get no more improvement. The Toyota Production System clearly reveals excess manpower… Management’s responsibility is to identify excess manpower and utilize it effectively. Hiring people when business is good and production high just to lay them off is a bad practice. On the other hand, eliminating wasteful and meaningless jobs enhances the value of work for workers. Taiichi Ohno.

9 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg9 Implementing the TPS Develop A Lean Strategy Create a sense of urgency Throughout the enterprise, sell lean/TPS as the solution Hire a sensei & retain design talent Establish targets Resolve how to maintain mutual trust while reducing people Give preliminary thought to supplier issues Consider the competitive environment Manufacturing as a Competitive Weapon Design The Manufacturing System Identify the customer base and product range Identify takt time & its range Apply axiomatic design to create the basic factory system Eliminate non- essential infrastructure and layers above the factory floor Establish Flow Within Cells Form cells based on takt time Define standard work content for each operation to be < takt time Separate worker from machine (jidoka) Develop quick setups & standard WIP (SMED) Standardize operations Form cells based on takt time Define standard work content for each operation to be < takt time Separate worker from machine (jidoka) Develop quick setups & standard WIP (SMED) Standardize operations Establish Pull Between Cells Design an information system to produce only the products required by the downstream cells Incorporate takt time to drive flows Institute leveled production (heijunka) Use visual control systems Implement total productive maintenance Strive For Perfection Institute kaizen & institutionalize 5Ss throughout organization Transfer ownership of all processes to work force Push lean down to suppliers Integrate product development Reduce people at all levels in the organization All activities must support the goal of “shortening the time it takes to convert customer orders into deliveries.” Toyota Motor Corporation, 1992 (Hit any key/left mouse button to continue) Apply axiomatic design to create the basic factory systemApply axiomatic design to create the basic factory system A TPS Glossary

10 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg10 Identify the customer base and product range Identify takt time & its range Apply axiomatic design principles to create the basic factory system Develop A Lean Strategy Create a sense of urgency Throughout the enterprise, sell lean/TPS as the solution Hire a sensei & retain design talent Establish targets Resolve how to maintain mutual trust while reducing people Give preliminary thought to supplier issues Consider the competitive environment Manufacturing as a Competitive Weapon Design The Manufacturing System Establish Flow Within Cells Form cells based on takt time Define standard work content for each operation to be < takt time Separate worker from machine (jidoka) Develop quick setups & standard WIP (SMED) Standardize operations Establish Pull Between Cells Design an information system to produce only the products required by the downstream cells Incorporate takt time to drive flows Institute leveled production (heijunka) Use visual control systems Implement total productive maintenance Strive For Perfection Institute kaizen & institutionalize 5Ss throughout organization Transfer ownership of all processes to work force Push lean down to suppliers Integrate product development Reduce people at all levels in the organization All activities must support the goal of “shortening the time it takes to convert customer orders into deliveries.” Toyota Motor Corporation, 1992 Create a sense of urgency Eliminate non- essential infrastructure and layers above the factory floorEliminate non- essential infrastructure and layers above the factory floor Resolve how to maintain mutual trust while reducing peopleResolve how to maintain mutual trust while reducing people jump Hot buttons Integrate product developmentIntegrate product development Throughout the enterprise, sell lean/TPS as the solutionThroughout the enterprise, sell lean/TPS as the solution Transfer ownership of all processes to work forceTransfer ownership of all processes to work force Apply axiomatic design to create the basic factory systemApply axiomatic design to create the basic factory system A TPS Glossary Hot Button Excursions

11 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg11 We strive continuously to find and implement ways to shorten that (order-to-delivery) sequence and to make it flow even more smoothly. A smooth flow of production and continuing improvements can support tremendous gains in productivity and product quality. Toyota Motor Corporation Success in war depends on the golden rules of war: Speed, simplicity, and boldness. Patton

12 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg12 We strive continuously to find and implement ways to shorten that (order-to-delivery) sequence and to make it flow even more smoothly. A smooth flow of production and continuing improvements can support tremendous gains in productivity and product quality. Toyota Motor Corporation Success in war depends on the golden rules of war: Speed, simplicity, and boldness. Patton

13 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg13 The Toyota Production System follows The Tao (“The Way”), the ancient Eastern concept of harmony, flow, and power Home The End Zen and the TPS Foundations: A TPS Glossary

14 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg14 “Create a Sense of Urgency.”— title of a chapter in Tom Peters’ Thriving on Chaos Companies that are making even a modest profit never use the Toyota Production System…Companies that are doing fairly well become selective (i.e., in what measures they are willing to take)—Taiichi Ohno Only the Paranoid Survive—Title of Andy Grove’s (Chairman of Intel) book Windows (and Microsoft) can be replaced—Bill Gates Back Create a Sense of Urgency

15 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg15 Back Eliminating Non-Essential Layers Question: Who were the people in those six management layers Mike Walsh eliminated? Answer: The railroad's (and the nation's) best and brightest. (Tom Peters, Crazy Times Call for Crazy Organizations, p. 33, refering to Union Pacific and its president, the late Michael Walsh) “Neutron Jack” —nickname for GE Chairman John E. Welch. Early in his tenure as chairman, he had eliminated so many layers and positions that people said the place looked like it had been hit by a neutron bomb - the buildings were standing but the people were gone. Excessive layers are: expensive, slow, and rob subordinates of initiative. “With one-third the volume and three times the variety, the Japanese company has only one-eighteenth the number of overhead employees.” (Stalk & Hout, 53) Elimination of these layers gives an immediate boost to your efforts to create a sense of urgency. Ideally, this should done in one fell swoop, before other improvements are well underway. Otherwise, you may be seen as “eliminating people as a result of improvements.”

16 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg16 Back Maintaining Mutual Trust The most important factor is maintaining a relationship of trust between labor and management—Shigeo Shingo If you don’t trust the people, you make them untrustworthy—Tao Te Ching. Implies that the company system needs to reinforce improvements, including cost savings: Need to reward people for reducing the number of people at all levels of the organization. Toyota has created a way to do this. For example, when a team reduces the number of people it needs, the top member of that team is removed and promoted or sent for special training, etc.

17 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg17 Selling theTPS As of this writing (1998), the TPS is the only system that can make major improvements in throughput time and cost and quality and flexibility, simultaneously The TPS is the only production system with the stated goal of both reducing costs and increasing sales If your employees don’t have an opportunity to test your thinking in live sessions or electronically, your message will seem like so much hot air … Resist the temptation to do what’s easy here. Communicating strategic change in an interactive, exposed fashion is not easy. But it is absolutely necessary. (Andy Grove, Paranoid, 157.) The message: Sales strategy: Back

18 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg18 Transferring Ownership “Writing the standard worksheet yourself”—title of a section in Ohno’s book An especially important aspect of standardized work at Toyota is that the employees who implement its guidelines are the same people who establish those guidelines—TMC, Toyota Production System, p. 40 Experience has proven that the more authority employees have to manage their own work, the more inclined they are to pursue improvements in that work—ibid, p. 7 Back

19 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg19 Axiomatic Design I It all starts with our understanding of what the customer will buy (“wants”) Wants define functional requirements (FR)—the business objectives and “whats”—which are then satisfied by design parameters (DP), the “hows.” Rule: one DP for each FR Two major axioms: –Independence: Strive for an uncoupled design (maintain independence in the design matrix), which 1) minimizes the opportunities for unexpected system behavior and 2) eliminates need for the extensive optimization required by coupled designs –Information: roughly, minimize the information content. Implementing the TPS AD II Based on the decomposition of the TPS by Professor David Cochran of MIT

20 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg20 Axiomatic Design II Using the axioms, one can develop a “production system design hierarchy” that proceeds down several levels to the actual machine and operation design The Toyota Production System guides the decomposition and provides the DPs. For example, the following are meant to satisfy the high level FR, “Increase Sales Revenue”: –Mass Production DP: Maximize Production Output –Lean DP: Maximize Customer Satisfaction AD I Why AD

21 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg21 Why Axiomatic Design? Using axiomatic design we can create a top- down blueprint for the factory, including –cell layouts (number, composition, arrangement) –integration of subassembly flows into final assembly –information systems to link components Most important, when the components are completed and linked, we can be confident that they will work together harmoniously to produce our products at the rate we specified and reap the benefits of the TPS. AD II Implementing the TPS

22 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg22 Back Toyota’s own development system is matched to the TPS. It is not a case of removing “non-value-added” activities from a conventional design process.* Toyota uses a relatively unstructured development process: its multidisciplinary teams are neither collocated nor dedicated While conventional concurrent engineering (CE) reduces the number of prototypes, Toyota’s suppliers seem to multiply prototypes, to an apparently absurd degree While in most cases, CE seeks to freeze specifications quickly, Toyota’s engineers and managers try to delay decisions and provide suppliers with hard specifications very late in the process. Toyota’s development process seems to require about 50% fewer person-years than Chrysler’s LH. * From “The Second Toyota Paradox: How Delaying Decisions Can Make Better Cars Faster,” by Allen Ward, Jeffrey K. Liker, John J. Christiano, and Durward K. Sobek II, Sloan Management Review, Spring 1995, pp. 43ff.

23 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg23 As educated Japanese, the creators of the TPS were followers of the philosophy/religion known in the West as “Zen” The fundamental ideas of the TPS have immediate roots in e.g., –Total elimination of waste: “When people practice an art, they always think they will have another chance to try again, so they are not aware of the slackness in their minds at the moment. Each time, determine that you will settle the matter with this one arrow.” —The Japanese Zen classic, Tsurezuregusa –Flow: “Zen Master Takuan’s instructions to the martial artist Yagyu Munenori all hinge on the central principle of fluidity…” —Thomas Cleary, The Japanese Art of War. –TPM: He who excels at resolving difficulties does so before they arise.—Tu Mu, canonical commentator on the Taoist classic, Sun Tzu’s Art of War We seek the Way and study it devotedly.—Taiichi Ohno Zen and the Art of Implementing the TPS Zen/Taoism The End More Zen

24 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg24 You don’t need to be a Zen master to implement TPS. However, The whole of the TPS reflects a coherent philosophy about the way the world works. So, pieces of the TPS taken out of context may not produce the results we want. For example, kanban are generally considered just a control mechanism. But compare: –“The paperwork is minimal. The efficiency is maximal. And the employees themselves are completely in charge.” Toyota Motor Corporation, Toyota Production System, 1992, p. 29 –“The Master does not talk, she acts. When her work is done, the people say, ‘Amazing: We did it, all by ourselves!’” Tao Te Ching, c. 500 B.C., 17. * *On the other hand, it couldn’t hurt Implications The End Zen/ TPS

25 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg25 Zen and Taoism in The TPS Although this presentation tends to use the labels interchangeably, Zen and Taoism are actually different things (with Zen borrowing heavily from the indigenous Taoism). Zen is a school of Buddhism—originally from India—that arose in China in the 7th Century A.D. and came to Japan starting in the 13th Century. Among its fundamental ideas, as applied to the TPS, are “the mind that does not stick,” objective perception of the world, and implicit communication among individuals. The samurai Miyamoto Musashi’s classic, Book of Five Rings (1645 A.D.), which is widely studied in Japanese business schools, embodies a Zen approach to competition. Taoism is an ancient Chinese philosophy dating back (according to legend) to the Yellow Emperor in the 3rd millennium B.C. It stresses harmony and flow and recommends a minimalist approach to management. The ideal Taoist doctor has no reputation as a healer because there is no disease in his or her area. Perhaps the best known Taoist texts to westerners are the Tao Te Ching, c. 500 B.C., and Sun Tzu’s Art of War, from c. 400 B.C. More info? The introductions to Thomas Cleary’s The Japanese Art of War and his translation of Sun Tzu’s Art of War (both from Shambhala Press), and, of course, Robert M. Pirsig’s Zen and the Art of Motorcycle Maintenance and Lila. Back

26 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg26 Cost vs. Vitality & Growth As you reduce costs, you create options: –Lower prices, which often lead to higher market share –More R & D –Growth through acquisitions or diversification –Higher investment in training and equipment –Greater profitability, which rewards shareholders, including employees Options give the company the means to survive on its own terms, even in slow economic times, and grow as the economy recovers Back

27 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg27 A TPS Glossary 5Ss—five Japanese words, all beginning with an “s” sound, which establish the cultural environment for continuous improvement Cycle time—for a machine or cell, time from completion of one item to completion of the next. Cycle times must harmonize with takt time (which defines balanced production). Often confused with throughput time, which is the length of time a part is in the cell (also, “factory throughput time,” from the start of production to delivery). Heijunka—(fm. Japanese*, “smoothing, making level”) production leveling. Involves producing in sequences like abacababac rather than aaaaabbbcc (where a, b, and c are models or products). Solves problems inherent in the TPS that can cause queuing and line stoppages. Jidoka—(fm. Japanese, “automation with human characteristics”) separation of worker and machine. Implies that machines will stop if an error occurs. Alternative is “people watching machines work.” Allows manning of cell to vary with demand. Encourages teamwork and facilitates kaizen. Implementing the TPS II *Many thanks to Lennart Kampman of the Copenhagen Business School for his translations and interpretations.

28 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg28 A TPS Glossary, II Just-in-time—“In a flow process, the right parts needed in assembly reach the assembly line at the time they are needed and only in the amount needed.” (Ohno, p. 4). As Ohno explains, this does not imply that the parts must arrive exactly when needed. Instead, a pull (kanban) system is used. Toyota explains that the goal of JIT is “to translate each order into a delivery of a finished, quality vehicle as quickly and efficiently as possible.” Kaizen—(fm. Japanese “kai,” change, modify, improve and “zen,” goodness, virtue - not the zen in Zen, which comes from the original Chinese, “Chan”) continuous improvement. Activities carried out by the members of a cell or other unit in order to improve production within that unit. May involve work process or machines. Ultimate goal is to shorten throughput times and increase the ratio of processing (“value added”) time to total time, leading to an eventual reduction in manpower. Other improvement efforts are kaikaku, or radical change, carried out under the direction of sensei. IIII Implementing the TPS

29 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg29 A TPS Glossary, III Kanban—(fm. Japanese for “signboard”) Primary means for controlling production in the TPS. Kanban are usually cards that the downstream cells take to the upstream cells in order to withdraw (pull) parts. The upstream cell then uses the kanban as shop orders to replenish just the parts taken. Lean production—producing with a shorter delivery span, at lower cost, with greater quality, and with more flexibility (variety on the line; quicker introduction of new models) Sensei—teacher, commonly of the martial arts; used to denote an expert with a track record of implementing the TPS SMED—single minute exchange of dies. Very rapid set-ups so that heijunka sequences can be produced economically IIIV Implementing the TPS

30 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg30 A TPS Glossary, IV Takt time—(fm. the German for meter or measure, as in music) pace of customer demand. Time to produce one item sold, e.g., a car every 2 minutes or an aircraft every 8 days. Cycle times of all components of the factory must harmonize with takt time (axiomatic design ensures this), or shortages & build up of inventory will occur. Toyota Production System (TPS)—only known example of a lean production system. Pillars of the TPS are just-in-time (pull) and jidoka. These rest on leveled (heijunka) & balanced production, and lead time reduction, which depends on reducing set-up times to under 10 minutes (ideally less than 1). The basic form evolved at Toyota from 1948 to 1973, largely under the guidance of Taiichi Ohno. IIIV Implementing the TPS

31 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg31 A TPS Glossary, V Total Productive Maintenance—ensuring that machines are 100% available during the production period. Generally requires operating machines at well under full utilization to allow time for maintenance & modification Value added—a term used by Toyota only in connection with kaizen, where it is generally synonymous with “processing” (see Ohno, p. 57) Visual control—management by sight. The TPS arranges the factory so that abnormalities stand out and so can (and will) be eliminated. More info? Most of these terms are well defined and illustrated in Lean Thinking, by James P. Womack and Daniel T. Jones (New York: Simon & Schuster, 1996) IV Implementing the TPS

32 Dr. C. W. Richards 1/12/99 Industrial Blitzkrieg32 What’s So Great About Toyota? Spurred by the mid-1970s recession, other Japanese companies began installing the TPS, achieving gains in labor productivity in the 150% range, and increasing net asset productivity by an average 50% (Stalk and Hout, Competing Against Time, 152) By the mid-1980s, the International Motor Vehicle Program at MIT documented that Toyota was building cars in roughly half the time, at roughly 2/3 the manhours, and with one-fifth the defects. IMVP researchers coined the phrase “lean production” to describe the TPS and compiled their findings in the book The Machine that Changed the World. Further, it could develop cars in half the time required in Europe or Detroit. Companies using the TPS consistently provide “fresher product offerings that have a higher degree of technological sophistication.” (Stalk & Hout, 30) Despite the current Asian economic troubles, which caused a 14.4% drop in Toyota’s Japanese car sales, its automobile operations actually increased in profitability, and continued to gain market against rivals in North America (New York Times, November 21, 1998) Back


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